The coalition agreement stated that the government would "make every effort to tackle tax avoidance, including detailed development of Liberal Democrat proposals". On Newsnight last night it was revealed that the Lib Dem proposals included tax avoidance by senior public sector employees.

Alexander boasted that in 45 of 83 cases that had passed his desk he had managed to lower the pay level. In at least one case it now seems he did this by excusing the individual involved from paying tax. David Willetts, the universities minister, has defended the decision, saying the state saved money through this arrangement. If Lester had been obliged to pay tax like the rest of us, his wage bill would have been increased accordingly.

This is absurd. Why then should any public servant have to pay taxes? Should the head of HMRC have to pay income tax, or would it be more cost effective to let her off? Should the prime minister?

What kind of message does this send to self-employed workers in the private sector who have just spent January filling in their tax returns? What kind of message does it send to the benefit cheats and fraudsters that the PM says he is uncompromisingly chasing?

Willetts has form in this kind of intellectual triangulation. Back in the days of the John Major government he had to resign after "dissembling" over his involvement in Neil Hamilton's fall from grace.

In that same Treasury session in the Commons last week, Alexander said: "Our message to tax dodgers is, 'No matter how well known you are, how clever you think your accounts are or how far away you hide your money, we are coming to get you'." Sanctimonious hypocrisy.

At a time when the public finances are so tight that benefits are being cut for cancer patients and the disabled, Alexander is giving the go-ahead for well-paid public servants to avoid paying income tax. As well as being morally indefensible, the arrangement is corrosive for public service and public servants. Alexander must answer questions urgently about how many other deals of this kind he has let through and what estimate he has of the total cost of these deals to the public purse. What didn't he know, and when didn't he know it?

It is a great irony that a government that has set up a new model of student finance which threatens to price a generation out of higher education has at the same time excused from taxation the very man in charge of recouping student debt.